FlySafair says the fact that national carrier SAA is no longer subsidised by the government bodes well for competition in the industry. (Gallo Images/Jacques Stander)
Air travel in South Africa is becoming a privilege of the well-heeled few, with would-be fliers facing a growing scarcity of tickets and industry insiders predicting prices could jump fourfold because of the collapse of Comair.
The cost of international flights has also rocketed, in large part because fuel price rises triggered by the war in Ukraine.
At the time of writing, tickets from Johannesburg to Cape Town, the most popular route, were sold out until Monday 10 October. A one-way ticket on FlySafair cost R3 284.
That is cheap by the standards of Airlink, which had no flights until Sunday and was charging R5 279 for a one-way flight.
“It’s a bit like the 1970s and 1980s when you had to plan your flights a year ahead,” said aviation analyst Desmond Latham. “Gone are the days where you could just say: ‘Let’s fly to Cape Town next week.’ If you wanted to get there for Christmas, you should have booked in August.”
Latham said it appeared for the next 24 months flights on short notice would be premium travel. Travellers would have to plan and book outside surge destinations and times.
Prices of domestic air tickets have soared since the collapse of Comair, the owner of low-cost carrier Kulula and the South African partner of British Airways.
Comair, which supplied 40% of fares, went into business rescue in May 2020. Flights were suspended on May 31 this year when the airline applied for provisional liquidation.
The Competition Commission has warned remaining operators they will be monitored for any price gouging.
BusinessTech recently reported the cost of air travel in South Africa had increased by almost half over the last 12 months and the loss of Comair could lead to ticket price increases of as much as 400%.
Jonathan Ayache, co-founder and chief executive of Lift Airline, said rising input costs were driving increases. “Fuel, which makes up more than half the cost, has more than doubled in the past 12 months. The weakening rand also impacts the cost of aircraft leases, maintenance and insurance,” Ayache said
He noted some carriers had closed because they had absorbed higher input costs, while low and unpredictable demand over the last 18 months had kept prices low.
Other factors driving higher prices included the Covid-19 recovery and the approach of summer.
Ayache added that although demand for air travel was recovering and flights filling up more quickly, “there is still availability at affordable fares if you book in advance”.
Kirby Gordon, chief marketing officer at FlySafair, said the challenge facing the aviation industry was that of demand.
“The number of people wanting to fly has recovered faster than we have. This is actually good news because it indicates South Africa and local tourism is open for business and people want to travel locally. The downside is that seats are selling out.”
He noted that the past two weeks had been particularly bad because of the condensed October school holidays, which has concentrated demand over a short period.
“Growing supply will also normalise the prices to a degree. One should keep in mind that although someone may be boarding a flight today with a ticket that cost R2 200, there is also someone aboard who booked in advance and is flying for just R740.”
Gordon warned the rise in fuel costs — from about 45% to 65% of total — meant that prices would not fall to their previous levels.
The problems are not confined to local carriers and predate the Covid pandemic. Management consulting firm McKinsey pointed out that from 2012 to 2019, despite strong economic growth and low fuel prices, global airlines were bleeding an average of $17-billion a year in profits.
“Fuel prices have risen substantially and because of this ticket prices are not coming down anytime soon,” Latham said. “The government not being able to manage the economy successfully has weakened the value of the rand against the dollar and we buy our fuel in dollars.”
In the immediate aftermath of Russia’s invasion of Ukraine the price of crude oil jumped to $123 a barrel. It has since fallen back to $88.
Latham said South Africa’s high ticket prices mirrored those of Australia. “You can’t get flights from, say, Sydney to Melbourne, without paying a premium — as in South Africa, prices have doubled. We have the added problem that the rand is weaker than the Australian dollar.”
Australian media report the cost of flying had increased by more than half since April. The upward trend is set to continue for at least the next two months, according to the Australian Competition and Consumer Commission.
There is some prospect of increased local capacity after Takatso Consortium undertook to acquire a 51% stake in South African Airways after the national carrier was grounded for 18 months.
The department of public enterprises recently said in a statement it is committed to the finalisation and onboarding of the Takatso Consortium and the transaction had been submitted to the relevant regulators for approval.
Mango, a low-cost airline belonging to SAA, was also grounded. However, it does not form part of the Takatso-SAA deal and can’t resume operations until it finds an investor.
Ayache said Lift had added more capacity and would continue to do so gradually and responsibly. The airline planned to increase the size of its fleet over the coming months. It had just launched a Joburg-Durban route and would soon initiate flights between Durban and Cape Town
“The growth in our fleet will coincide with the expansion of our route network,” he said. “Expansion is demand-driven; we will be guided by the commercial viability of routes rather than growth or market share.”
Last month, Lift expanded the size of its fleet and flight frequency between Joburg and Cape Town.
SAA also said it had deployed additional capacity on the Cape Town route to meet demand.
“SAA continues to ramp up its operations by bringing additional equipment into the fleet,” it said.
Gordon said FlySafair would operate 30% more flights in December compared to December last year.
“This year, we have added four aircraft and, if all goes according to plan, we’re hoping to add a fifth. This December we will operate 3 826 flights — last year we operated 2 929.
“Assuming no massive, unexpected movements, winter 2023 will probably be when we see some really cheap seats available again.”
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